Scott Wizig's bread and butter is first-time home buyers with bad credit. He says he's making dreams come true, but many say dealing with him has been a nightmare.

It started when Lynda Bushy saw one of the small yellow bandit signs lining the curbs in her northeast Houston neighborhood: Homes available for people with bad credit. Call now.

Bushy, a 43-year-old data coordinator for M.D. Anderson, never had owned a home. But she and her husband, a retired carpenter, wanted to leave something permanent behind for their three children.

A home was "something I can grow old with and they can mature with, you know?" Bushy says now. "We don't ever have to move again, you know? Put a swing set in the backyard."

Harry Scull Jr

Wizig sold 98 homes to a bogus company for $1.

John Anderson

Doggett: "It's a wonderful deal for Wizig, but it's a horrible deal for the occupant."

Bushy, her husband and their 13- and 11-year-old children lived comfortably in a three-bedroom manufactured home. Their oldest, in his twenties, lived on his own. Their home was nice, and Bushy never thought much about owning a house thanks to the family's poor credit history. Because of the three car repossessions on her record, every home she was interested in required at least $7,000 down. But this little yellow sign raised her hopes.

When Bushy called the number, she found a helpful sales agent at Scott Wizig Enterprises in Bellaire. The company has sold single-family homes and apartments throughout Houston since 1987 and is one of about 30 corporations Scott Wizig has registered with the Texas Secretary of State's office. They own hundreds of properties. The agent provided the Bushys with a list of homes in their price range, and the family dropped their $3,000 tax refund check as a down payment for a house on Kings Chase.

Or at least Bushy thought it was a down payment.

She says the agent switched the paperwork from a down payment agreement to a lease agreement with an option to buy. Bushy found it weird, but at the time it just seemed like a technicality.

Bushy also found it strange when she went to pick up the house key from the agent and was told Scott Wizig Enterprises didn't have a key to the front door. She says the agent gave her a set of doorknobs and a new key, and told Bushy to get into the house through the garage door and change the knobs herself.

"I should've known then -- if they don't have the key to the front door, something's wrong," Bushy says.

They soon discovered the air conditioning in their new home would not turn off. The kitchen's electrical outlets didn't work, so they had to run an extension cord from the dining room. When Bushy called Scott Wizig Enterprises to complain, she says, she was told to have a priest bless the property with holy water. The house needed an exorcism, they said.

By April, two months after the family moved in, they were told to move out. The company says she never paid. Bushy says they never accepted her monthly check.

The way Wizig conducted business was enough to make Bushy suspect there were others like her out there. But nothing could prepare her for what showed up on an Internet search.

It turned out that Wizig didn't operate just in Texas. He was infamous in Buffalo, New York, where many considered him to be the worst slumlord in the city's history. His deceptive business practices drew heat from the state attorney general's office and the city's housing court. For years, Wizig battled the residents and authorities of Buffalo and New York state without making so much as a peep in Houston.

In Buffalo, his leases landed him in criminal court. In Houston, his leases made him rich.

In October 2000, Scott Wizig bought 281 homes in a Buffalo foreclosure auction for $615,700.

No one in Buffalo ever had heard of the Houston property owner, but Mayor Anthony Masiello told The Buffalo News he was "cautiously optimistic" about Wizig's plans. The newspaper called him "the city's gutsy new landlord." Shortly after Wizig bought the homes, the paper sent an investigative reporter to Houston to thumb through Wizig's background. According to the paper's subsequent story, "Wizig has kept a good reputation. The director of Houston's code-enforcement division, who professes to know every slumlord in the city, has never heard of him."

The homes Wizig bought were in Buffalo's most blighted neighborhoods -- many were abandoned and awaiting their execution on the city's demolition list. The city's decades-long population loss had left a nearly 16 percent vacancy rate, according to a 2004 Brookings Institute study.

The abundance of vacant homes in some neighborhoods led to more criminal activity, says Kim Harman, who heads a housing advocacy group called Eastside PRIDE. Wizig bought many homes in the same neighborhoods Eastside PRIDE has spent the last seven years trying to clean up. When the city owned the properties, she says, officials were responsive to Eastside PRIDE's pleas to board up or tear down whatever homes they could. But Wizig was a different story.

"Suddenly those houses were in the hands of a private owner that was not responsive at all," Harman says.

Although Wizig paid an average of $2,200 each for houses that were in awful condition, he was able to get people to agree to pay ten times that amount, not including exorbitant option-to-buy fees and 12 percent mortgage payments. This rent-to-own program, similar to the one currently used in Houston, eventually became the subject of a state attorney general's investigation.

"I think a lot of people in any neighborhood wouldn't read all the fine print," Harman says, "but especially when he was targeting first-time home buyers, many of whom were, like, right out of public housing; folks were just not familiar with this process at all."

When signing the leases, tenants unknowingly waived their rights to live in houses that met New York's standards and, in some cases, were not made aware of the presence of lead paint in their homes.

Housing officials soon complained that Wizig routinely ignored numerous violations and hired inept and often unlicensed repairmen to do the work.

"He is the biggest slumlord we've ever seen in Buffalo," city housing court representative Frank DeJames told The Buffalo News in January 2002.

By the end of the year, New York State Attorney General Eliot Spitzer sued Wizig. An AG's report from 2003 stated that Wizig's homes "frequently had failed heating systems, no water or gas, inoperable toilets, leaking roofs, collapsed ceilings and exposed electrical wiring -- all of which are violations of housing codes. Wizig's leases and rental contracts contained illegal provisions that held tenants responsible for repairs he was legally required to make and forced tenants to pay double the cost of repairs he performed."

But in Buffalo's housing court, Wizig faced jail time as well as fines. Prosecutors had charged Wizig's company, NY Liberty Homes, LLC, with ten violations each on 100 properties, amounting to 1,000 violations.

As the corporation's sole managing member, Wizig himself could be penalized for the violations, according to city prosecutor Lenora Foote.

Buffalo's housing laws allow for 15 days in jail per violation, to run consecutively. Wizig faced 41 years in jail. However, the city's housing court has jurisdiction only in Erie County, meaning Wizig would never spend a day in jail as long as he stayed out of the county.

But Wizig settled with the city in the same way he settled with the state attorney general. His attorneys entered guilty pleas on behalf of NY Liberty Homes on about 200 violations.

Under the terms of the settlement, NY Liberty Homes was required to establish a $200,000 repair fund, Foote says. The city also forced him to set aside an additional $175,000 if the repairs weren't completed within six months (and they weren't).

Harman believes the city let him off easy. She says many residents thought he was worse for the neighborhood than the small-time drug dealers they always fought.

"He did more damage to the neighborhood than a lot of the young kids that get busted for selling once or twice," she says. "And this guy still is a businessman."

But Foote says the penalties encouraged Wizig to get out of Buffalo.

"We don't really object to him selling, because we'd rather somebody else have it than him, because he's been such a detriment to our city," Foote says. "The faster he's out of here, the better."

Wizig startedby selling 98 blighted homes for $1 to something called the Nonprofit Training Institute, ostensibly located in an Atlanta suburb, run by Jacquelyn Johnson and Willie Johnson (no relation), a self-described minister who also goes by Willie Muhammad.

The NTI has only a post office box number and a Web site with stock photography and little mention of what the organization actually does. The phone number listed on the Web site rings up an answering service, but when the Houston Press tracked down Jacquelyn Johnson, she refused to explain what, how or who the institute trained. Although the NTI incorporated in 1999, a LexisNexis search on the institute did not turn up any stories other than the institute's relationship with Wizig.

According to The BuffaloNews, Willie Johnson provided credentials to the city showing that he previously worked as a high school math teacher and as an exporter of chickens slaughtered according to Islamic rites. He also said he sold herbal supplements.

Buffalo officials say the NTI has done nothing to improve the properties it bought from Wizig.

Here's where things get a little weird: One of the properties the NTI bought from Wizig was a former Catholic church, built in 1928. Last May, an Amherst minister named Perry Davis said he bought the church from NTI and planned to restore it with community donations. But he quickly vanished, and so did 13 of the church's stained-glass windows. Some of the windows ultimately turned up on eBay, where a Miami church offered to buy them for $4,950. Buffalo police confiscated the windows.

A subsequent records check revealed that Davis never owned the church. It was owned by Houston real estate developer Jim Youngblood. Only Youngblood didn't know it.

"What am I going to do with a church in New York?" Youngblood says from his HomeVestors office. "All I did was give a guy a loan for a lien on the church, and the next thing I know, some guy named Reverend Davis is selling off windows."

Youngblood says he lent Willie Johnson $30,000 to take care of the church's lien. Suddenly Johnson had deeded the title to him and skipped town, leaving Youngblood $30,000 short and owning a property he didn't want.

Housing officials looked high and low for Johnson, but all they could find out, according to The Buffalo News, was that he might be in Ghana.

The city's housing judge then issued warrants of arrest for Davis, Johnson and Youngblood. The housing judge also ordered the demolition of the 98 properties Wizig sold to the NTI. Youngblood has not been arrested.

Wizig used to sell many properties through what is known as a contract for deed, where a buyer receives a property's deed only after paying the amount agreed upon in the contract.

In 2001, the Texas legislature increased protection for buyers of contract-for-deed properties. Whereas some safeguards previously applied to specific counties, the new law covered the state.

Under the new law, all sellers had to file annual accounting statements detailing how many payments the buyer made, or else face stiff fines. The seller also had to disclose all tax-payment and insurance information as well as warn the buyer of hidden costs such as a prepayment penalty for paying off the house before the agreed date.

Harris County court records show that during July and August 2002, Wizig granted more than 250 contract-for-deed properties to a Miami-based lender called BayView Financial Trading Group.

The lease that Lynda Bushy signed is described as an option to purchase and therefore is not protected under the 2001 contract-for-deed law.

On its face, Wizig's lease is nearly identical to the template drafted by the State Bar of Texas's Real Estate Forms Committee, a cadre of top-notch attorneys from all around Texas.

The template is meant to convey the highlights of Chapter 92 of Texas's property code in clear, direct language that is anathema to many residential leases. It boils the chapter's 46 pages down to six, leaving little room for anything but the basics. The template simply refers the lessee to the chapter in order for them to know of "certain rights." It does not explain, for example, that the landlord is required to install smoke detectors. It is also vague on eviction.

According to the template, the eviction process is a simple matter whereby a landlord may "enter and take possession of the premises" if the tenant doesn't pay rent.

But Chapter 24 of the property code (nowhere referred to in the template) describes eviction as a lengthy process requiring the landlord to notify the tenant in writing, file an eviction suit, argue before a judge and notify the tenant of a writ of possession. Only then may the landlord enter the premises, and only under the supervision of a deputy or constable.

The lease that Bushy signed differed in several ways, the most important being the section providing an option to buy. She paid a nonrefundable $2,900 option fee up front and agreed to pay timely rent for two years before she could enact the option to buy. She could then purchase the home for $87,900, a $4,395 down payment, a $250 origination fee and twice the "reasonable amount" the landlord paid for repairs, renovations, maintenance and improvements to the house. She could pay in cash or through a 12 percent, 30-year mortgage through Wizig. None of the rent, or the $2,900 option fee, would count toward buying the house.

Bushy also agreed to pay the first $750 for repairs that were "not obligations of the landlord," although the lease doesn't say what those obligations are. She agreed to pay late-rent charges at a rate of $100 for the first day and $10 for each following day.

Discounting the interest, repair costs and late charges, Bushy would pay $116,336 for a home the Harris County Appraisal District values at $69,700.

The state bar's Real Estate Forms Committee declined to comment on Wizig's lease.

But attorney Robert Doggett of the nonprofit Texas Rio Grande Legal Aid says the lease is one of the most egregious contracts he's seen in 14 years of practice. Doggett is an expert on tenant-landlord affairs for the agency, which provides civil representation for the indigent.

"It's overreaching; it's taking advantage of people's lack of understanding. If you had a really smart buyer on the other end of this thing, I wouldn't be worried, but of course a really smart buyer would never, ever touch this," he says.

Not only is the lease designed to prohibit the tenant from complaining about repairs, it's set up for the tenant to fail, Doggett says.

"Here's the problem: Over and over and over again in this thing, it starts talking about if you default, you lose your option" to buy, he says. "So all these technical little defaults could be used to try to keep that little option fee It's a wonderful deal for them, but it's a horrible deal for an occupant. And it's really not a very good thing for a neighborhood or the city. There's nothing good about this thing from anyone else's perspective."

Doggett's not alone.

Sam Presley of the Austin Tenants Council, which is the strongest tenant advocacy group in Texas, says the lease "allows for a lot of abuse on the part of the landlord to take advantage of the tenant."

Carmen Massie, who sits on the board of the Texas Federation of Housing Counselors, says the lease is the very kind of contract she tells consumers to avoid. The federation is approved by the Texas Department of Housing and Community Affairs to educate first-time home buyers.

"I've worked with other investors who actually do these types of lease-purchase contracts, and they only do these things for their benefit," she says. "They always know that the tenants are never going to go through with the purchase, so that's why they charge these high lease-option fees."

The federation's classes are approved by the Texas Department of Housing and Community Affairs' first-time home buyer program. Many of the consumers Massie works with have the same kind of credit as Wizig's clients.

"This is predatory," she says. Buyers with bad credit "just look at it, 'Well, oh, somebody's going to give me a house ' And their eyes just get so bright that they really don't pay attention as to what they're signing. They really don't. And they end up in a lot of trouble."

But Wizig says he's providing a valuable service, helping people who can't get help anywhere else.

Of his Buffalo experience, Wizig says, "We made some mistakes, no question about it. Ultimately, we tried to do the best we could, and we resolved any consumer complaints that we had there."

He says that although some of his lease provisions may be firm, he's always willing to work with tenants to make sure they can keep their homes. He says his sales staff's motto is "underpromise and overdeliver."

"We're a company that really prides ourselves on giving everyone the benefit of the doubt," he says. He accuses Lynda Bushy of taking advantage of his company's patience by being late on her very first rent check.

"From day one, she breached this agreement," he says. He points out that Bushy broke her yearlong lease with her previous landlord at the manufactured-home community, ultimately owing them several thousand dollars. Bushy says the $2,000 owed comes not from lease penalties but from the landlord's claim that her faulty washing machine damaged the floors.

Wizig sees her lease-breaking and debt as a sign of an unfit tenant. Yet Bushy had no problem moving her family into a town house immediately after she was evicted.

Robert Wisner, a Houston real estate lawyer who helped draft Wizig's lease, says the provisions are clear, fair and legal. Wisner, who has written several books and many articles on truth-in-lending issues, says Wizig goes out of his way to comply with Texas's mammoth property code.

"He's put people in homes who would not otherwise have an ability to get into homes. And obviously these are people who cannot go to traditional landlords so there's a certain additional amount of risk that he takes," Wisner says. "You've got to keep on these people a little bit harder and make sure you get paid every month, and when you don't, you kind of got to follow up on it. Otherwise, you know, they'll kill you -- you know, you'll end up with people just living in your homes, not paying you."

On the 8500 block of Lee Otis Street, a little dead-end road between Cullen and Scott, sits a small wood-framed house on concrete blocks.

Its 720 square feet contain four rooms in total, including two bedrooms and one bath. Built in 1950, it has a window air-conditioning unit and is graded an E-plus by the Harris County Appraisal District, the second-lowest grade possible. A grade of C means the structure has an "average quality of workmanship, architectural design and materials." The house is adjacent to and across the street from several boarded-up and burned-out wood-framed homes.

The district valued the home at $13,600. Wizig just sold it for $49,199.

The house was last sold in 1994 for $3,240.

Wizig says the county's appraised value is not a true indicator of what a home should sell for.

"The HCAD value has little to do with what the sales price is," he says. "Our prices are simply market-driven. If our price is too high, the consumer lets us know by not buying the home."

Not so, says the county's assistant chief appraiser, Guy Griscom.

"It's a grossly elevated price, based on the other properties that are actually selling out there," Griscom says. He says a similarly sized and graded house in the same neighborhood recently sold for $15,000.

"This is not a very good neighborhood, and the idea that somebody paid $50,000 for a house in there is -- you know, there's some other story that goes with that."

That story, according to Griscom, involves a property owner who does not believe the buyer will ever pay off his liens, which are under Wizig's name.

"I guarantee you he has no intention of those people ever paying off those liens," Griscom says. "He wants to milk out as much as he can get out of it, get it back, fix it back up to the minimum he needs to do to sell it to some other poor soul that can't do anything else."

The Lee Otis house is typical of the homes Wizig advertises. A 700-square-foot home on Shotwell Street, graded at D-minus, was advertised last year for $29,999. The county appraised it at $12,600. A 63-year-old, three-bedroom house on Goforth that was given a D-plus was advertised for $37,999. The county appraised it at $15,000. (Incidentally, Wizig's A-plus house is valued at $982,000.)

Griscom was the only local official contacted for this story who was willing to discuss the nature of Wizig's business practices.

Although the Texas Workforce Commission's Civil Rights Division has a housing department that investigates complaints, both the department's interim housing director and supervisor refused to answer questions about the lease's legality and fairness. The Texas Department of Housing and Community Affairs, which offers low-interest loans and grants to clientele similar to Wizig's, lacks the authority to warn the public of predatory lenders and exploitative leases, according to a department spokesperson.

Scott Durfee, general counsel for the Harris County District Attorney's Office, described the office as a reactive authority that looks into complaints but does not initiate its own investigations.

"We don't see something interesting, you know, that occurs in New York and then open up our own investigation on that same conduct here in Houston," he says.

Wizig laughs at the idea that his option-to-buy contracts are set up for the lessee to fail.

"We want an uninterrupted income stream, and the only way we get that is if the customer's happy," Wizig says. "That perception that we're interested in the customer failing could not be further from the truth and further from reality. It just makes no sense We probably lose, on an average eviction, probably two to three months' rent plus all the repair expenses going back in, plus all of the expenses involved with putting the property back in rentable condition once the tenant leaves. So, you know, easily a turnover could cost us $4,000 to $5,000 at the bat of an eye."

Griscom isn't convinced.

The Lee Otis Street resident "hasn't even filed a homestead on this property," Griscom says. "You're dealing with people that just don't understand the marketplace; they don't understand what to do. We're going to send something out to this individual 'If this is your principal place of residence you need to file for a homestead,' because, you know, they need the same protection everyone else has They need all the same rights as everybody else, but most of these people just simply don't know that. It's terrible, it really is."

Although Lynda Bushy is temporarily happy in her new town house, she still wants a home with a yard and a swing set for her kids.

She has filed a complaint against Wizig with the Texas Attorney General's Office, which has received two other complaints from women who found themselves in situations similar to Bushy's. In one of the complaints, under the question "What do you believe would be a fair resolution to this matter?" the woman wrote, "For them to not triple-charge for a house in deplorable condition. For them to stop preying on poor neighborhoods and poor people."

While Wizig has sold most of his Buffalo properties, housing officials in Syracuse are complaining about the status of the 25 or so homes he owns there.

"About half of his properties got outstanding issues, which is not a real good track record," says Jim Blakeman, head of the city's code enforcement department. "His team of repairmen are undesirable, in my expectations so if you were really expecting to do a great job in this city, I don't think you would've retained these individuals, myself."

The bulk of Wizig's properties there are managed by a Syracuse real estate investor named John Kiggins, who in 1991 pleaded guilty in federal district court for his involvement in a $1.4 million HUD-loan scam. Kiggins admitted to lying on federally insured loan applications and received a six-month sentence, according to the Syracuse Post-Standard. Prosecutors said Kiggins led a group of investors who used illegally attained HUD money to buy properties and sell them at much higher prices to others in the group, a scam known as flipping.

Two Houston attorneys have filed or are scheduled to file suits against Wizig for deceptive trade practices.

Meanwhile, Wizig's little yellow signs continue to sprout along roadsides throughout Houston. Home for sale! We finance! No credit needed! It sounds too good to be true.